UK sees growing labour shortages

21st of September 2017
UK sees growing labour shortages

Employers in the UK say they have struggled with growing labour shortages since the Brexit vote last summer. Hartley Milner looks at how a downward trend in migration is impacting on sectors that have come to rely on workers from the EU.

Britain is fast losing its appeal as the land of milk and honey for Europeans seeking to build better futures for themselves and their families, according to the Office for National Statistics (ONS). Latest figures show net migration to the UK fell to about 248,000 in 2016 – a drop of 84,000 from the previous year.

Net migration is the number of people who have moved to the UK for at least a year less the number who have left. The change in 2016 was due to more people leaving, especially EU nationals, as well as fewer people arriving.

The ONS estimates immigration to be 588,000, comprising 250,000 EU citizens, 264,000 non-EU citizens and 74,000 British citizens. At the same time, an estimated 339,000 people left the country – 134,000 British, 117,000 EU and 88,000 non-EU citizens.

And the trend looks set to gather pace throughout 2017, according to the latest Labour Market Outlook survey from the Chartered Institute of Personnel and Development (CIPD). The report says that as many as one in four employers (27 per cent) have seen evidence that non-UK nationals from the European Union were considering leaving their organisation and/or the UK this year.

“This is creating significant recruitment challenges in sectors that have historically relied on non-UK labour to fill roles and who are particularly vulnerable to the prospect of future changes to immigration policy,” said CIPD labour market adviser Gerwyn Davies.

Gathering pace

One particularly vulnerable sector is farming. The UK’s growers were looking forward to reaping bumper yields this year despite an unusually cold and dry spring. But their optimism has been blighted by a worrying shortfall in the number of seasonal workers required to bring in the vegetable and fruit harvests.

More than 1,500 farm vacancies went unfilled in May, according to a survey by the National Farmers Union (NFU). The figure coincides with a 17 per cent fall in the number of seasonal pickers seeking work between January and May, compared to just four per cent during the same period last year, before the referendum.

The UK requires about 80,000 seasonal pickers and virtually all come from Eastern Europe. An NFU survey shows that just 14 of the 13,400 workers recruited between January and May this year were British. At the same time, the proportion of overseas workers choosing to return to the UK year-on-year almost halved from 65 per cent to 33 per cent, meaning valuable experience is being lost.

The NFU believes seasonal workers are being put off by the falling value of the pound and lack of clarity relating to Britain’s future relationship with the EU.

“Farmers and growers need to know how the government will deal with the need from industries that rely on seasonal workers,” said Ali Capper, who chairs the NFU horticulture board. “The NFU is calling for reassurance that farmers will be able to source a reliable and competent workforce both now and in the future. Without that, this trend is likely to continue and will hit hard.”

Skills crisis

Construction is another major contributor to the British economy. It generates almost €98 billion annually (6.7 per cent of GDP) and employs in excess of 2.93 million people, the equivalent of about 10 per cent of UK employment.

Construction was hit hard by the 2008 recession but has returned to growth and is now seen as a linchpin of government plans for building a prosperous future post-Brexit. However the Federation of Master Builders (FMB) reveals in its State of Trade survey for the final quarter of 2016 the sector faces acute shortages in many of the construction skills it will need to carry out the ambitious programme of housing and infrastructure projects.

Brian Berry, chief executive of the FMB said: “We’ve been experiencing a severe shortage of bricklayers and carpenters for quite some time – the latest statistics show that skills shortages are now seeping into other key trades such as roofers and plumbers.

“Indeed, of the 15 key trades and occupations we monitor, 40 per cent show skills shortages at their highest point since we started to feel the effects of the skills crisis in 2013 when the industry bounced back post-downturn. This growing skills deficit is driving up costs for small firms and simultaneously adding to the pressure being felt by soaring material prices linked to the weaker pound.”

And he added: “The prime minister must ensure the immigration system that replaces the free movement of people serves key sectors such as construction and house building. Our sector relies heavily on skilled labour from the EU, with 12 per cent of the British construction workforce being of non-UK origin.

“As the construction industry represents around seven per cent of UK GDP, it’s in no-one’s interest to pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.”

Private and state health and social care provision in the UK has been dependent on migrant labour for decades. Today approximately 60,000 of the 1.2 million National Health Service (NHS) workforce is drawn from other EU countries, including more than 10,000 doctors and more than 20,000 nurses and health visitors. In adult social care 90,000 of the 1.3 million workers employed by local authority and independent employers come from elsewhere in the Union.

Following the referendum in June last year, health and social care leaders sought to reassure migrant staff that they remain welcome and valued wherever they come from. Despite this there is evidence that Brexit has already had an impact.

Official figures show the number of nurses from the EU registering to work in the UK has dropped by 96 per cent since the Brexit vote. Numbers plummeted from a high of 1,304 in July last year to 344 two months later in September and then continued to fall, with just 46 EU nurse registrants in April this year.

International recruitment

The Health Foundation, which obtained the information via a freedom of information request to the Nursing and Midwifery Council, said the UK has repeatedly used international recruitment as a stop-gap measure to fill staffing shortages, and since 2008 the majority of international nurses registering in the UK have come from within the EU.

“The recruitment and retention of nurses is one of the biggest challenges facing health and social care, with a shortage of 30,000 nurses in England alone,” said Foundation director of research and economics Anita Charlesworth.

“The drop in EU nurses registering to work in the UK could not be more stark – just 46 registered to work in the UK in April. Without EU nurses it will be even harder for the NHS and other employers to find the staff they need to provide safe patient care. The findings should be a wake-up call to politicians and health service leaders.

Action needed now

“Clearly action is needed to offset any further loss of EU nursing staff in the near future. But the overall shortage of 30,000 nurses is not a shortage caused by the Brexit vote. The chronic shortage of nurses is the result of years of short-term planning and cuts to training places. A sustainable, long-term approach to workforce planning is desperately needed.”

The adult social care sector has an estimated vacancy rate of 6.8 per cent, rising to 11.4 per cent in domiciliary care. High turnover is also an issue, with an overall turnover rate of 27.3 per cent (equating to around 339,000 workers) leaving their role each year.

But what of our industry? There are more than 9,000 cleaning companies in the UK employing at least 700,000 people and contributing about €26 billion to the British economy. The number of overseas workers employed in the sector is higher than the national average, at 23 per cent compared to 17 per cent.

However a snap survey conducted by the Cleaning and Support Services Association (CSSA) on behalf of ECJ found no evidence of labour shortages among its members that could be attributed to the Brexit effect. Only in London was there a pointer to possible recruitment challenges ahead, with cleaning companies reporting competition from other sectors placing shop window ads for part-time workers.

Employers who are impacted may take heart from a pledge that the government will be seeking to cushion the blow of Britain’s exit in the spring of 2019. Chancellor Philip Hammond said recently the UK wants a transitional period of about three years from the leaving date and the start of trade talks with other countries, allowing continued free movement and access to the single market.

“As we leave the European Union, we will have an implementation period which will ensure we continue to have not just access to labour but the economic stability and certainty that business requests,” he said.


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